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Nebinger v. Maryland Casualty Co.

July 14, 1998

LEROY NEBINGER, AN INCOMPETENT BY HIS GUARDIAN AD LITEM, LINDA BARRETT, GLAYDS LEWIS, GUARDIAN AD LITEM FOR ELIZABETH WELLS, AN INCOMPETENT, AND DOLORES CAPPUCCIO, PLAINTIFFS-APPELLANTS,
v.
MARYLAND CASUALTY COMPANY, DEFENDANT-RESPONDENT.



Before: Judges D'Annunzio, A. A. Rodr¡guez and Coburn.

The opinion of the court was delivered by: Rodriguez, A. A., J.A.D.

[9]    Argued: April 1, 1998

On appeal from the Superior Court of New Jersey, Law Division, Camden County.

The opinion of the court was delivered by

The issue presented in these consolidated appeals is whether a minibus used by a senior center to transport its paying clients to various activities is a "vehicle used for transportation of passengers for hire" within the meaning of N.J.S.A. 39:1-1 so as to require medical expense benefits (MEB) coverage pursuant to N.J.S.A. 17:28-1.6. We hold that such use of the vehicle does not constitute transportation of passengers for hire within the meaning of the statute.

The material facts are not in dispute. On September 17, 1993, a paratransit minibus, owned and operated by Senior Care Centers of America, Inc. (Senior Care) collided with a truck. Senior Care is a for-profit privately-held corporation which provides adult medical day- care services to the elderly and handicapped. Senior Care's clients pay weekly fees for a full day of programs involving various nursing and social work services, individualized and therapeutic activities, and other health care related services and activities. For the same fee, Senior Care provides transportation to activities as well as back and forth from the clients' homes to the Center each day.

Leroy Nebinger, Elizabeth Wells, and Dolores Cappuccio (plaintiffs) were Senior Care clients who were injured in the collision between the minibus and the truck. They sought MEB from Maryland Casualty Company (Maryland), the insurance carrier for their host vehicle. *fn1 Maryland denied their request asserting that the policy issued to Senior Care for the minibus did not provide MEB coverage and that such coverage was not mandated for that vehicle. Prior to the accident, Senior Care inquired of the Department of Transportation (DOT) regarding the proper license, plating, registration, and inspection of its minibuses. The Director of the Office of Regulatory Affairs for the DOT informed Senior Care that:

[T]he New Jersey Department of Transportation finds that the described van service of Senior Care Centers of America, Inc., is not at this time for- hire passenger transportation and, therefore, is not autobus service under the jurisdiction of this Department. Should there be a change in the nature of this service, such as the introduction of a fare or the use of a separate carrier, the service would need to be re-evaluated at that time.

Since this Department of Transportation does not deem the described service as autobus operation, the use of "omnibus" license plates on this vehicle would not be correct.

Plaintiffs filed a declaratory judgment action and moved for summary judgment. Maryland cross-moved for summary judgment. All parties agreed at oral argument that resolution of this dispute turned on whether the minibus was a "motor bus" as defined by N.J.S.A. 17:28- 1.5. If so, MEB coverage is mandated by N.J.S.A. 17:28-1.6.

The Judge denied plaintiffs' motion and granted Maryland's motion for summary judgment concluding that the fact that Senior Care received compensation for the services rendered did not, by itself, make the minibus a vehicle for hire. He found that the minibus "was not generally available to the public . . . It's used for [Senior Care's] clients on a limited basis to provide transportation which is an essential component of the services rendered." The Judge also found persuasive the DOT letter. Plaintiffs appealed.

On appeal, plaintiffs contend that the minibus is a motor bus pursuant to N.J.S.A. 17:28-1.5 because it is a vehicle used to transport passengers for hire. We disagree. At the outset we note that the determination by the DOT that the minibus "is not at this time for-hire passenger transportation" is persuasive but not determinative of the issue before us.

N.J.S.A. 17:28-1.6 provides:

a. Every owner, registered owner or operator of a motor bus registered or principally garaged in this State shall maintain medical expense benefits coverage, under provisions approved by the commissioner, for the payment of benefits without regard to negligence, liability or fault of any kind, to any passenger who sustained bodily injury ...


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